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Mergers & Acquisitions

Albemarle scraps bid for Australian lithium miner

Few options remain as the firm seeks to expand through acquisition

by Matt Blois
October 18, 2023 | A version of this story appeared in Volume 101, Issue 35


A dry desert landscape with an area carved out for lithium mining.
Credit: Liontown Resources
Albemarle says it's still hoping to increase production through acquisitions, even after its bid for Liontown, shown here, failed.

The US chemical firm Albemarle is withdrawing its bid to acquire the Australian lithium miner Liontown Resources after another company built up a large enough stake to potentially block the deal. With Liontown off the table, Albemarle has few options as it seeks to expand lithium production by purchasing mines close to starting up.

After months of negotiations, Albemarle offered to buy Liontown in September in a deal worth $4.3 billion. Liontown executives endorsed the proposal, and Albemarle began a due diligence process. During that period, the Australian mining firm Hancock Prospecting built up a nearly 20% stake in Liontown, likely enough to vote down Albemarle’s proposal, according to a research note from the investment bank Jefferies. On Oct. 15, Albemarle announced that it backed out due to the “growing complexities.”

Albemarle says it still hopes to increase production through acquisitions. But it won’t be easy to find lithium mines that will begin production soon, according to Cameron Perks, a lithium analyst with the research firm Benchmark Mineral Intelligence. Perks says Pilbara Minerals in Western Australia could be an attractive target but notes that the company isn’t courting buyers and might be too expensive to interest Albemarle.

“They can change tack and go very early stage, look at explorers,” he says. “But unsure if that’s within their risk profile or capabilities.” Albemarle may also turn its attention to Canada, Perks says, which offers a level of political stability similar to Australia.

Liontown was close to securing the $450 million needed to open its mine before Albemarle’s offer and says it still expects to receive the cash.



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